The Value of e-Procurement for Procurement in Construction

The Value of e-Procurement for Procurement in Construction

Malaysia’s construction industry has enjoyed a period of enviable growth in recent years. Construction sector growth in 2015 stood at 8.2%, falling slightly to 7.5% in 2016 before projected growth of 8% in 2017. Those figures speak to a sector working hard to meet the demand of Malaysia’s growing economy, and the growing needs of its citizens as a result. But no industry is immune from downturn, and so delivering a lean, efficient enterprise must always play a part in an organisation’s strategic outlook.


Construction Sector Growth
2015 – 8.2%
2016 – 7.5%
2017 – 8%*
Source: CIDB

*projected


Construction is a sector which, quite literally, offers the foundation to a thriving nation. But ensuring its own foundations are secure means weathering the natural shifts in landscape which can occur at times of change. The evolving political priorities of Malaysia’s new government offer one example, delivering an uncertain future around some of the nation’s flagship infrastructure projects.

There’s no need for despair of course. The bulldozers will keep rolling and the cranes keep lifting as part of what is still a buoyant industry. After all, Malaysia’s focussed ambitions to drive towards developed nation status won’t evaporate overnight, nor will its need for better roads, expanding public services or continued demand for new homes.

Never the less, it’s still clearly a period of some uncertainty for the construction industry. At times like that, the role of e-procurement is more significant than ever.

Benefits of e-procurement for construction

As competition grows for construction projects in Malaysia, so too does the need to stay competitive as a business. That means improving productivity while enhancing overall economic efficiency. In meeting those needs, efficient procurement has an essential role to play.

There’s no doubt that procurement costs can be the make or break of project feasibility in the construction industry. A 2012 study entitled Critical cost factors of building construction projects in Malaysia ranked ‘availability and supply of materials’ and ‘risk of fluctuating in material prices’ as critical factors in profitability. The opportunity with e-procurement is to mitigate those costs in a way that unlocks wider value for your business.

The evidence for e-procurement isn’t hypothetical. Procurehere’s own platform has demonstrated over 17% savings for users to date through our powerful auction functionality. That can be a significant saving for customers delivering key projects.

“We conducted a reverse auction on Procurehere for the construction of a wharf and access bridge that was awarded at a cost saving of close to RM18 million. This was just one event, and we run more than 80 events a year.” – Ahmad Damanhury, Head of Civil Engineering, Westports.

A 2013 study entitled Exploring e-Procurement Value for Construction Companies in Malaysia explored similar benefits, noting that e-procurement was seen by adopters to provide ‘improvements in operational and tactical areas’. Better operations and strategic planning form the lynchpin of sustainable operations in a rapidly evolving business landscape.

It’s not just in direct material acquisitions for one-off projects that e-procurement plays its part. Procurehere’s requisitioning function can help you reduce the turnaround for key purchase requests from weeks to just days, ensuring a more efficient operational environment that supports an efficient business.

The opportunities of e-procurement aren’t a universal solution for every challenge that the construction industry can face. It won’t offer a view into the future to see what tomorrow’s challenges might hold. What it will do is make you more resilient to those challenges as they emerge.

Procurehere offers a valuable opportunity to empower your business. It’s a user-friendly tool designed to help you ensure a more efficient operational process. Ultimately, it’s one more opportunity to build firm foundations for your construction business.

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